It happened on Morris Avenue in the Bronx early Wednesday morning.
Neighbors say they tried to save them.
The devastating news sent family members running into each other's arms.
37-year-old Vincent Cordero allegedly stabbed his wife Kety Sanchez, and then set their apartment on fire, killing both his wife and their 1-year-old daughter Keity.
Police say they have been to their Morris Avenue apartment before and believe this suspicious fire is connected to ongoing domestic problems.
Kety's sister told Eyewitness News that the family doesn't know what exactly happened or why.
Sources say the 30-year-old mom was stabbed three times in the chest and died of multiple burns.
Her baby also died because of the fire, she was not stabbed.
Erick Carpio says just before 8 a.m. Wednesday, he heard a loud explosion, jumped out of bed, and ran into the hallway where he found the baby's grandmother begging for help.
Carpio says he could hear the child crying inside the pitch black apartment, but the blaze was too much for him to get to her.
Moments later, dozens of firefighters arrived, but it was too late.
They put out the fire in about half an hour.
Cordero was taken to St. Barnabas Hospital in critical condition with burns all over his body.
He was later transferred to Westchester Medical Center where he died Wednesday night.
Two other siblings and a grandmother were able to escape the five-alarm blaze with only minor injuries.
The fire burned through several floors of the apartment building.
"We had heavy smoke coming out the fifth-floor windows," Deputy Assistant Chief Kevin Butler said. "We got up to the apartment and we're being told there were children trapped in the apartment. The units got in, and we had one bedroom completely engulfed in fire."
Four other residents were treated for non-life threatening injuries. But it was a tragic scene for all those who had to witness it.
"It's horrific any time you have any fatality, nevermind when it's a young child," Butler said.
It took about 65 firefighters to get the fire under control.